When it comes to investing in a new venture or service, a big part of the decision is the potential return it promises. For businesses in particular, return on investment (ROI) is crucial and anything that’s going to make more money than it costs to run is typically regarded as having a decent ROI.
However what businesses need to remember is that ROI doesn’t just apply to the financial side of things. In an age where increasingly, education-based marketing methods are (arguably) becoming more popular than the traditional hard sell, this point is even more pertinent.
There’s more to it than just money
It can be tricky laying out the potential ROI on methods like content or social media marketing. Although we content marketers are confident that businesses WILL benefit from an improved reputation, being positioned as a thought leader and better quality traffic, it is difficult to relay this in financial terms.
During my morning trawl of the latest content marketing tweets this morning, I stumbled upon an interesting article about the recent Super Bowl and how well brands which advertised during its half-time fared. Citing research from the Centre for Measurable Marketing (CMM) at New York University’s Stern School of Business, the article threw up a term I haven’t yet come across – Conversational ROI.
Measuring the impact of social media conversation
Coined by NYU Stern, the term was defined as “both the direct impact of word-of-mouth communication on marketing performance, including dollar sales, as well as the amplification effects which social provides to both offline and online paid channels of communication.”
It’s about the social conversations we, the public, are having about a brand and how this relates to the business’ initial investment in advertising/marketing. It struck me as really interesting that social media marketing has become so significant that it warrants a specific ROI terminology all to itself.
In fact the director of research at the CMM, E. Craig Stacey PhD, believes that if businesses measure the conversations happening around their brands, they can adjust their communications to reflect this – which could “dramatically impact their ROI”, he claims. So what sort of things can businesses analyse to effectively utilise this metric?
Who, what, where, how…
It’s all about the basics. Who is talking about the brand, where are they based, when are they saying it and how often? Perhaps most importantly, what are they saying about the brand? This is where you can really dig deep down into the conversation; working out the ratio of positive to negative tweets or Facebook updates. Even taking the neutral content into account can help.
It’s also worth considering how influential the people who most regularly talk about your brand are on the respective social media networks. For example, if they are particularly prolific on Twitter and therefore have the power to influence other users, a business should keep them on their radar; perhaps also taking them into consideration when using targeted communications.
Thinking about what people are saying in relation to their location could prove useful too, as you can target specific demographics via segmented campaigns.
Lastly, understanding the time of day and week a business’ most valuable Facebook/Twitter users are likely to post content about it can be crucial…
If a business increases the reach of its content (and therefore its promotions, services, overall brand), it opens itself up to a whole new world of potential consumers. In fact, the chances are some of these consumers are already talking about that business.
The conversation is already happening, it’s just up to businesses to get involved and then take the chance to educate and engage with consumers – potentially leading to a sale. What better ROI is there than that?